Goldman Sachs reiterated their Buy rating and $40 price target on Citi (NYSE: C) following recent Q1 results saying the company is "shifting in all the right directions".

The firm noted positive operating leverage across all major businesses and geographies for the first time in two years; Expenses in Citi Holdings are now tracking the decline in assets and they see a clear path for Basel III Tier 1 common to
increase from 7.2% today to 10% by year-end 2013.

Overtime, Goldman pegs earnings power above $5 per share from the normalization of environmental expenses and the wind-down of Citi Holdings.